Living Wage

In my last post I looked at the question of how to calculate the just or living wage, using figures from Father Ryan’s classic text A Living Wage brought up to date by adjusting for inflation. Commenter Restrained Radical, however, thinks that in merely adjusting for inflation I was being too stingy:

Adjusting for inflation isn’t necessary the best way to adjust Fr. Ryan’s figures. Real GDP per capita grew faster than inflation. In other words, Americans got wealthier. Using Fr. Ryan’s figures today adjusted for inflation would be appropriate if real GDP per capita was stagnate for 89 years. In 1919, GDP per capita was $805. If you only adjust for inflation, that would be $9,897 today. That’s somewhere between Cuba and South Africa. So $6.15/hour would be an appropriate living wage for a family of 5, in Cuba.

If instead we adjust for unskilled labor wage increase (4.24% annualized since 1919), $1,400 to $1,500 then would be $56,388 to $60,416. That’s probably closer to what Fr. Ryan had in mind.

In 2008, median household income in the United States was $52,029. If Restrained Radical’s interpretation is correct, then it would seem Father Ryan was advocating a kind of Lake Wobegon society, where everyone has the right to an above average income.

Catholic Social Thought has long recognized the right to a “just wage” (sometimes called a “living wage”), which is defined as a wage “sufficient to enable [a man] to support himself, his wife and his children.” CA 8. One common objection to the idea of the just wage is what might be called the calculation problem. Sure, the criticism goes, everyone would agree in the abstract that wages should be sufficient to support oneself and one’s family, but how are we to decide what is sufficient? What, specifically, is the minimum wage that a man may be paid without violating his right to a just wage?

For answers, I went to Father John Ryan’s A Living Wage, which is the classic American text in defense of the right to a just wage. Chapter five of the book, A Concrete Estimate of A Living Wage, tackles the calculation problem head on, and Father Ryan offers a specific estimate of the amount of wages a man must be paid as his due in justice (in what follows all figures appear to assume a five person family of husband, wife, and three children).

In the first edition of A Living Wage (published in 1906), Father Ryan gave $600 a year (or $14,143.39 in 2009 dollars*) as the minimum wage necessary to qualify as a just wage in the United States. Father Ryan opined that this wage was “probably” sufficient in certain parts of the country (such as the South) where the cost of living was lower, and was possibly sufficient elsewhere, though he noted that there were “certainly” parts of the country where it was insufficient.